Mar 9, 2009

Corruption: its deleterious impact on public administration and development

Corruption is rampant in much of the developing world. It is pervasive at all levels of public management including the deliberate mismanagement of national economies for gain. Despite stringent anti-corruption laws and permanent commissions/boards to curb it in a number of countries, it reigns supreme. In many parts off the world, its sweep is so wide that the public at large feel that the battle to curb it is futile and they are tolerating it without protest.Corruption has been defined in a variety of ways by social scientists. However, for purposes of identifying corrupt practices and comparisons across systems, the most satisfactory definition is the one given by I. Nye: (corruption is behaviour which deviates from the formal duties of a public role (elective or appointive) because of private consideration regarding (personal, close family, private clique) wealth or status gains; or violates rules against the exercise of certain types of private privileges regarding influence. Corruption is thus an illicit form of influence employed by people and groups to get things they want from government and its functionaries or to prevent actions they do not want.Much has been written on the causes of corruption. It has often been attributed to greed. The world renowned social scientist Ibn-e-Khaldun attributed it to the “the passion for luxurious living within the ruling group” which has a lot of vitality. Others have ascribed it to particular cultures. Still others have pointed out that corruption tends to be widespread when social norms are in flux or breakdown. Corruption has been blamed on to much capitalism and competition as well as on too little, on colonialism and on the withdrawal of colonial powers; on traditional regimes and on the breakdown off traditions.Too many and varied causes of corruption have been analysed in a number of studies across the globe. How multifarious those are is pointed out in one of the books by a Nicaraguan accountant Francisco Ramirez Torres, who ascribes it to the family, the school, attitudes to work, the enterprise, the nation and the international situation. At the level of the individual transgressor, the causes of corruption include excessive consumption of alcohol, extra-marital activities, speculative losses, excessive gambling, “causes related to vanity”, administrative disorganisation, resentment inside the business, frustration, “the thirst for illicit enrichment” and some others.According to many economists, an important reason for corruption is to be found in the system of permissions, licenses and controls. When government officials allocate permissions, or licenses, they are in effect bestowing rents. Bribes in Anne Krueger’s terms constitute a flow of rents back to officials. Competition for that part of rent, which comes to officials, then takes place through competition to obtain the appropriate credentials for entry into government service, and to influence those in charge of appointments.An important cause of corruption in many developing countries is the persistence of inflation. The most unrelieved victims of inflation in most countries are those who work for the state. Discrimination against the public services is an organic feature of endemic inflation. Public administration consequently gets deeply demoralised. This is reflected in its inability to enforce laws, including those which relate to taxation and other public revenues, as well as in failure to maintain and improve basic social services like education, health, transport, electricity, water and drainage. Over much of the world there is a rough and not accidental relation between corruption and inflation.Somewhat surprisingly, some writers have argued that corruption is not all evil; it has positive development effects also insofar as it humanises the workings of bureaucracy, offering a way through red tape and satisfies the unfulfilled needs of particular groups. These perspectives, however, have received short shrift and are dismissed as functionless by most development economists and public administration experts. The conventional wisdom quite appropriately deems corruption as an unmitigated curse, which subverts resources away from the poor and acts against the wider national interest. Within the operation of an efficient bureaucracy, graft tends to exacerbate factional conflict relating to appointments; it weakens institutional performance by promoting people who are under-qualified, incompetent or corrupt, subverts policy goals and undermines legitimacy.There are, of course, different levels of corruption. In essence we are dealing with a continuum at one end of which according to Sizeftel; “public officials might fully utilise the perks, privileges and technical advantages offered by office while obeying the rules surrounding that office. At the other end of the continuum might be located activities that involve clear criminal behaviour, such as theft of resources by officials. In between these poles would be found such activities as patronage, nepotism, improper use of resources, the abuse of power for individual enrichment and the levying of charges already incumbent on the official.”A particularly baneful aspect of corruption is that it tends to favour the ‘haves’ rather than the ‘have-nots’ - particularly where the stakes are large. It assists the established elite to stay in power and appropriate larger benefits to itself.Corruption preserves inequalities by facilitating the direct and unequal appropriation of goods and privileges, by inhibiting changes which could threat the ‘status quo’, and by buying off potential movements for change.Despite the deleterious and devastating impact of corruption on administrative performance and economic and political development, there are thoroughgoing cynics who consider a campaign against corruption as futile; as if we were mounting a crusade against the sun’s setting.This defeatist approach, against this socially pernicious practice is, however, is totally unjustified.In the battle against corruptions as pointed out by Robert Klitgaard, several points seem important. First, corruption is a matter of degree and extent. Second, experience has shown that corruption certainly can be reduced if never eliminated. Third, most corrupt acts are not crimes of passion but crimes of calculation. Officials are not corrupt at every opportunity; and so it is reasonable to assume that an official undertakes a corrupt action when in his judgment, its likely benefits outweigh its likely costs. The benefits and costs vary according to many factors – some of which can certainly be influenced by public policy.The current worldwide trend towards the free market and toward democracy will certainly help to reduce corruption. As a general rule, it can be stated, that the larger the public sector the greater the scope for corruption. In the long run, competition and transparency both associated with free markets and with democracy are the enemies of corruption.Free markets, free press, democracy and separation of powers are to be heartily welcomed. But again, much of the action for curbing corruption will lie below the macro level changes. More than one country has discovered that macro-economic reforms and elections have not immediately reduced corruption; whatever the size and role of the state that a country deems appropriate. It encounters the threat of bribery, extortion influence peddling, kick backs, fraud and other illicit activities.It is however, heartening to know that fighting corruption is now at the top of the agenda of nearly every Third World government.Corruption is frequently a major issue in election campaigns. Polls in many developing countries support what many experienced politicians say: there are few issues about which the ordinary individual feels more disgust than corruption. It is relatively easy to launch an anti-corruption campaign during a wave of public resentment, but institutionalising the concern is a difficult task. The struggle for banishing corruption must, however, continue with unabated vigour. By Aftab Ahmad Khan